Trai norms on new licences; says no 'concurrence' to DoT

January 02, 2013 20:57 IST

Issuing recommendations for granting new telecom licences, Trai asserted that it is the regulator's responsibility to propose guidelines by saying there is no provision in the law "to give concurrence" to the DoT's proposals.

Earlier, the Department of Telecom (DoT) had issued broad guidelines for new telecom licences in Notice Inviting Applications (NIA) for spectrum auction that was held in November last year.

Trai said the DoT in a letter had requested the regulator to "examine and concur" with the terms and conditions in the Unified Licence (Access Services) given by the DoT.

"The TRAI Act does not contain any provision for the Authority to give 'concurrence' to the DoT's proposals. On the contrary, it is the Authority's responsibility to make recommendations either suo motu or in response to a request of the Licensor. The use of the word 'concur' is, therefore, inappropriate," the regulator said.

Trai issued recommendations on new telecom licences for those companies whose licences were cancelled by the Supreme Court and won 2G spectrum in recent auction.

"The NIA document is legally binding on both the DoT and the bidders. However, the Authority strongly recommends that the DoT should incorporate the Authority's recommendations in the proposed Unified Licence," Trai said.

In a major move, the regulator recommended removing cross holding norms from licence conditions and linking them with spectrum holding.

There seems to be no requirement of keeping substantial equity or cross holding requirement in the Unified Licence, as the spectrum is not

linked with the licence, it said.

"The substantial equity/cross-holding requirement should only be linked to spectrum holding and this condition should be included in the WOL (Wireless Operating Lincence) Agreement."

According to existing cross holding norms, no single company or person can have substantial equity (10 per cent or more) holding in more than one licensee company in the same service area.

The regulator has also recommended cancelling permit of service provider if that commits 'major' violation for the fourth time.

As per the TRAI Act, companies threatening security of nation, causing heavy revenue losses to government and 'wilful and illegal' conduct outside the framework of terms and conditions of the permit should be considered as major violation.

The DoT in NIA has mentioned only monetary penalty of up to Rs 50 crore (Rs 500 million) per service area in each case of violation of licence conditions, on discretionary basis.

The regulator, however, has recommended penalising telecom companies on the degree of violation, minor and major.

TRAI has recommended penalty in the range of Rs 100,000 to Rs 25 lakh (Rs 2.5 million) for minor violations. It has recommended minimum penalty of Rs 50 lakh (Rs 5 million) for major violation and after fourth such violation permit will be "liable for cancellation".

The regulator said government finalised broad structure of the Unified Licence in NTP-2012 before deliberating on its recommendations "notwithstanding the fact that provisions of the TRAI Act mandate that the Government shall seek the recommendations of the Authority on terms and conditions of Licence to a service provider."